I am a big believer in the alignment of objectives, goals and incentives for a business to achieve its maximum potential. If everyone is working toward the same goals and is compensated on those items that bring the most value to the business then you should have a structure that is both efficient and focused. Is that enough?
I was on an organizational wide call where there was a general discussion regarding the business structure and potential new opportunities in the market, and how to most effectively and efficiently pursue them. The group conducting the call was asking for input and ideas from the team based on the fact that the team members were the ones closest to the markets and issues and should therefore have some of the best ideas how to deal with them. This made sense to me.
It then took a strange turn. Members of the team then asked “would there be any incentives put in place based on their generation of ideas?”
Now I understand that incentives are designed to try and generate desired behavior, but where do we cross the line and start asking for incentives for people to “think”?
My logic here is that if you can come up with a better or more efficient way to do your job, you should implement it. If it truly is better, you should be able to exceed your existing objectives and then be compensated better based on the current incentives associated with your role. This is what you are paid for.
We are all essentially knowledge workers. We should try to generate the maximum value for our businesses possible. We do this by applying our knowledge to the best of our abilities. Incentives should be based on the output generated from the application of knowledge and ability, not the application of knowledge and ability itself.
Checking out this week’s TIME, Steve, it talks about your topic of rewards relative to kid’s performances in schools. Not exactly your point, but still a good discussion of “Has the Stick lost out to the Carrot?” The story posits that money, like any tangible reward doesn’t motivate well over the long run, especially involving creativity. But also offers that reward-money often becomes a more “regular” progress report than annual reviews, (with the warning that it can turn into a negative when it ends). Bottom line: altho the TIME story is about kids, and altho all of us work for money, my level of effort is motivated more by other things. The last sentence of the magazine story asks a kid why incentives work – she says “We’re kids. Let’s be realistic here”. I’m not sure what that means, but it sounds smart.
You are right on the mark Steve… Unfortunately – more often than not the “mission” is lost somewhere between executive management and the functional groups or individual contributors. The challenge is building the team that embraces the mission and can find sport in the end game!
Wendy, Thanks for the comment. Very well put!
A great example of this is the way Southwest Airlines approaches its people. Loading cranky passengers and their tons of crap onto an endless parade of crap brown 737’s could be a real deadend. Instead, the mission is to do more of this than anyone else in the industry can. The mission is bigger than the task. The mission is to be the best at what you do, just like some people will hack at a golf ball in, essentially, a pasture, for three hours in the heat of summer. It is not the task, it’s the satisfaction that comes from improvement, whether as an individual or a team.